California has seen an explosion of ADA cases in the past few years, leading the state to impose strict pleading standards and high filing fees for serial litigants. Litigants have previously found their way around this by filing in federal court, but the courts have made it clear that they will decline supplemental jurisdiction in these instances. Martin Orlick, Chair of JMBM's ADA Compliance & Defense Group, explains below.
California's Central District tries to curb ADA lawsuits by declining supplemental jurisdiction over state law claims - by Martin Orlick, Chair, JMBM's ADA Compliance & Defense Group
Declining to exercise supplemental jurisdiction, the United States District Court Central District of California (Central District) is addressing high frequency litigants who file lawsuits in federal court alleging violations of the Americans with Disabilities Act (ADA).
The Central District has been inundated with ADA lawsuits by California plaintiffs. According to its Minutes of March 8, 2021 noted in James Shayler v. JPMorgan Chase Bank there were 419 ADA cases filed in the Central District in 2013, constituting 3 percent of the civil actions filed. Fast forward to 2019, when in the first six months alone, ADA lawsuits comprised 24 percent of its civil cases (1,868 matters). ADA cases filed in 2021 are on pace for even more.
Similar numbers of ADA cases are being filed in California's Northern District which has seen a significant increase in ADA cases alleging 28 C.F.R. Section 36. 302 (e) hotel reservation lawsuits. In an effort to curb or streamline the plethora of ADA litigation, the Northern District recently revised its General Order 56.
Because California's Unruh Civil Rights Act allows ADA plaintiffs to sue for damages and attorneys' fees, California continues to see a rise in the number of ADA cases. In an effort to curb the ensuing explosion of ADA litigation, California adopted strict pleading standards for ADA lawsuits that claim "construction related" accessibility claims (also known as architectural barriers). It also imposed additional requirements on "high frequency litigants" and their counsel including a $1,000 filing fee in addition to the standard filing fees. But serial litigants and their lawyers found their way around these requirements by avoiding state court altogether and filing lawsuits in federal courts.
As the Court explained in James Shayler v. JPMorgan Chase Bank:
"Because California's heightened pleading standards and increased filing fees do not apply in federal court, plaintiffs can circumvent these restrictions simply by relying on Section 1367(a)'s grant of supplemental jurisdiction to file their Unruh Act claims in federal court when combined with an ADA claim for injunctive relief."
But federal courts have limited jurisdiction and broad discretion to decline supplemental jurisdiction for a number of reasons, including "exceptional circumstances". Exceptional circumstances can include forum shopping to evade state law requirements, as well as the sheer number of these ADA cases that ARE clogging the courts' dockets.
As the court points out in James Shayler v. JPMorgan Chase Bank, declining supplemental jurisdiction does not deprive the plaintiffs of any remedies, as the claims made under the ADA can be heard in federal court. But if the plaintiff desires to litigate the ADA claim and the claims made under the Unruh Civil Rights Act in a single forum, it can be done in state court in accordance with the requirements imposed by the State of California.
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JMBM Global Hospitality Group
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Jim Butler is a founding partner of JMBM and one of the top hotel lawyers in the world. Devoting 100% of his practice to hospitality, Jim is author of www.HotelLawBlog.com and chairman of the Global Hospitality Group® which focuses on representing hotel owners, developers, and lenders. Jim and his team have helped clients as business and legal advisors on more than $87 billion of hotel purchase, sale, financing, and other transactions, involving more than 3,900 properties all over the world. In the last 18 months, they have closed more than $1.5 billion of EB-5 financing and sourced more than half of that for our clients. In addition to acquisitions, dispositions and financing, the Group handles ADA compliance and defense, hotel mixed-use development, labor and employment, management, branding and franchise agreements and litigation. With experience gained from more than 1,000 bankruptcies, receiverships and workouts, they use innovative solutions to unlock and create value for lenders and opportunistic investors for distressed assets. Jim also serves as an expert witness in hospitality matters.
Martin H. Orlick
Marty Orlick's practice, encompassing more than 30 years, focuses primarily on real estate transactions and real estate litigation, including hospitality, financial institution, shopping center, retail and commercial leasing, acquisitions and sales, lease administration for developers and tenants, portfolio management, regulation of real property use and development, eminent domain litigation and counseling, and abstracting lease portfolios. He is experienced in counseling and defending clients with respect to Americans with Disabilities Act claims in State and Federal court and defending Department of Justice investigations and complaints, including negotiating Voluntary Compliance Agreements. His ADA practice includes counseling businesses on the full spectrum of ADA compliance including the development of policy and procedure manuals and website accessibility issues. Marty has represented the nation's largest financial institutions in corporate real estate, litigation, class actions, and ADA cases. He has also represented trust clients of Wells Fargo Bank, N.A., Bank of America and Bank of the West. He is a member of the Global Hospitality Group®.
Phone: +1 310 201 3526